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Volkswagen has always had a close relationship with Porsche, the Zuffenhausen-based sports car manufacturer founded in 1931 by Ferdinand Porsche, the original Volkswagen designer and Volkswagen company founder.

The first Porsche car, the Porsche 64 of 1938, used many components from the Volkswagen Beetle. The 1948 Porsche 356 continued using many Volkswagen components, including a tuned engine, gearbox and suspension.

The two companies continued their collaboration in 1969 to make the VW-Porsche 914 and 914-6, whereby the 914-6 had a 6-cylinder Porsche engine, and the standard 914 had a 4-cylinder Volkswagen engine, and in 1976 with the Porsche 912E (USA only), and the Porsche 924, which used many Audi components and was built at an Audi Neckarsulm factory. Most 944s also were built there, although they used far fewer VW components.

The Porsche Cayenne, introduced in 2002, shares its entire chassis with VW Touareg and Audi Q7, which are built at the Volkswagen factory in Bratislava.

On 13 February 2007 a German law preventing any shareholder in Volkswagen from executing more than 20% of the total voting rights in the firm. This opened the possibility of a hostile takeover of VW and so on 26 March of the same year Porsche took its holding of Volkswagen shares to 30.9%. Porsche formally announced in a press statement that it did not intend to take over Volkswagen, but intended the move to avoid a competitor taking a large stake and to stop hedge funds from dismantling VW. On 26 October 2008, Porsche finally revealed its plan to assume control of VW. As of that day, it held 42.6 percent of Volkswagen’s ordinary shares and stock options on another 31.5 percent. Hedge funds desperate to cover their short positions forced Volkswagen stock above one thousand euros per share, briefly making it the world’s largest company by market capitalisation on 28 October 2008. By January 2009, Porsche had a 50.76% holding in Volkswagen AG, although the “Volkswagen Law” prevented it from taking control of the company.

On 6 May 2009 the two companies decided to join together, in a merger.